The Silver State has become the cyberstate as Nevada lawmakers today voted to permit Internet gambling by casinos there.
Legislators approved the law even though the Justice Department says Internet gambling is illegal. State officials say court challenges could change the federal government's position.
Experts estimate that revenues from Internet gambling — largely conducted by offshore companies because of the U.S. ban — reached $1.5 billion last year and could reach $6 billion by 2003.
To ensure Nevada's expansion into Internet gambling moves ahead smoothly, the state Gaming Control Board and state Gaming Commission must first draft and adopt rules governing such gambling.
Those requirements would include assurances that minors wouldn't be able to play. Also the games couldn't be conducted from states that prohibit gambling.
Race With New Jersey
Some in New Jersey wanted to beat Nevada into cyberspace, but an Internet gambling bill introduced in the New Jersey Legislature in January that would permit casinos in that state to offer blackjack, roulette, slot machines and other games over the Web is stuck in committee and unlikely to see action before upcoming summer break.
In Nevada, AB466, which moved to Gov. Kenny Guinn for signature on a 17-4 state Senate vote, began as a uniform statewide work card system for casino workers. The Internet gambling provisions were amended into the bill after an initial plan for such gambling died in the Senate.
Proponents said the earlier version, AB578, was a victim of political maneuvering. Casino lobbyists — in another of their numerous legislative successes this session — followed up with more maneuvering to revive the idea.
Opponents included Sen. Terry Care, D-Las Vegas, who said a $500,000, two-year licensing fee for Internet gambling makes it impossible for small casinos and entrepreneurs to participate.
"What this is asking us to do is to legislatively sanction a monopoly for an exclusive few that has always prided itself on the competitive nature of the marketplace," Care said.
Fee for Reputable Business
Senate Judiciary Chairman Mark James, R-Las Vegas, said the $500,000 fee ensures that reputable companies undertake Internet gambling.
Hotel-casinos with unrestricted gambling licenses could apply to conduct Internet gambling, posting the $500,000 fee when applying for two-year licenses.
A manufacturer of an interactive gambling device would pay a $250,000 license fee; a $100,000 fee would be assessed against a manufacturer of equipment associated with a gambling device; and a $50,000 fee would be charged for a license of a manufacturer of peripheral equipment.
Casinos would pay a 6 percent tax on the gross win from the Internet.